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Roland Džogan: Retail in 2022 will be about flexibility and automated inventory management, even the smallest must arm themselves with technology

The past year has been marked mainly by the covid-19 pandemic, which has affected all industries.

However, one of the areas most affected by the pandemic was undoubtedly international trade. We have seen a sharp decline in global production, the whole world has faced supply chain problems unlike anything it has ever had to face in modern history, and as a result there has been a significant imbalance in the market between demand and supply of goods. Traders and suppliers were forced to react immediately to the changes brought about by the pandemic, but customers were also reassessing their behaviour.

The result of the rapid and unexpected changes was confusion at all levels of the supply chain. However, the problems that the supply chain has faced over the past year are very likely to continue. Experts believe that a return of the supply chain to its pre-pandemic state cannot be expected before several years, if ever. To create a new balance and restore customer confidence, retailers will therefore need to rethink their current solutions and be even more flexible and open to the trends that the past period has given rise to.

Automation of inventory management

Last year showed that the inability of traders to meet demand can be fatal. Whether companies were struggling with shortages due to delays in deliveries from overseas or an inability to correctly predict how much demand they could expect, the unavailability of in-demand goods is always perceived negatively by customers. It is not surprising, therefore, that not only replenishment systems are becoming the new standard, but increasingly also redistribution systems, which were previously seen as a nice-to-have.

The more automated and sophisticated systems that retailers have at their disposal, the better they will be able to respond to demand and adapt to customers. The winners will be those who learn how to dispose of orders and owned goods in such a way that they do not have empty shelves, but also surpluses, which will be solved by unfavourable discount promotions. In fact, discounts have a negative impact not only on the profitability of the business, but also on the reputation of the brand.

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Emphasis on sustainability

The need to better optimize inventory is compounded by the increasing pressure on sustainability. Indeed, the covid-19 pandemic has also had a bright side - according to research to date, it has made shoppers significantly more sensitive to the environmental impact of their purchasing behaviour. Many people returned to shopping locally at local retailers during the pandemic. This was due not only to a desire to support small businesses, but also to dissatisfaction with the heavy environmental burden that online shopping entails. It is therefore to be expected that not only will people gradually return to brick-and-mortar stores, but also that the environmental and sustainability activities of businesses will become an increasingly important factor in the success or failure of a company.

Circular economy

The circular economy, a trend that is increasingly being heard about, particularly in relation to sustainability and reducing the carbon footprint of industry and trade will also be a big topic for the coming year and beyond. Finding solutions to be able to put as many goods as possible back into the supply chain, reuse, recycle and re-sell them will be a major challenge. Although 2022 will probably not be a breakthrough year, it has great potential to be the year when sustainable solutions in the spirit of the circular economy lay the foundations.

Flexibility in the delivery of parcels

It's no secret that while brick-and-mortar stores have not been too well served by the pandemic, e-commerce has experienced a significant upswing in the past year. Online shopping has become a standard to which virtually all customers have become accustomed without fail, including those who were previously apprehensive about it. However, as their popularity grows, so do the demands for greater flexibility, particularly in terms of delivery. Same-day delivery, which used to be more of a luxury or a privilege of a few specific segments, will slowly become a necessity. Retailers that can deliver goods to their customers in the shortest possible time as accurately as possible and provide as much information as possible about the delivery will have a major competitive advantage in 2022.

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Last-mile solution

In order to provide greater flexibility in parcel delivery, it will be essential for companies to provide a last-mile solution. The last-mile technologies available to logistics companies today can provide customers with information about where their shipment is, when they can expect it, and everything in between. Last mile technology can also help address unexpected events during delivery, such as sudden transportation complications. Perfect information can be expected to be a key factor for customer satisfaction in the coming year.

As the list of some of the upcoming trends shows, the coming year should be mainly in the spirit of cooperation at different levels of the supply chain and retail. The days when companies tried to cover all steps with their own solutions are irretrievably gone. In order to provide customers with the quality of service they require, companies need to use specialised solutions for inventory management, redistribution and, where possible, onward delivery to customers.

It is becoming increasingly clear that retail will be under increasing pressure to keep up technologically with competition in the form of predatory and fast-growing e-commerce. It is evident from customer behaviour that brick-and-mortar stores are certainly not going away. To remain competitive, they need to arm themselves technologically, and this is far from just the largest retail chains.

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